5. Unilever PLC (NYSE:UL)
Dividend Yield as of December 29: 3.25%
Unilever PLC (NYSE:UL) is a British multinational consumer goods company that offers a wide range of related products. In the first half of 2024, the company experienced a 4.1% increase in sales on an underlying basis, driven by three consecutive quarters of positive volume growth. Pricing adjustments were in line with expectations, showing a gradual decrease. Improved gross margins provided the company with the ability to invest more in innovation, resulting in a significant boost to overall profitability. Its operating profit reached €6.1 billion, reflecting a 17.1% year-over-year growth.
Unilever PLC (NYSE:UL) has decided to abandon its plans to sell its €15 billion ice cream division to private equity firms and will instead focus on pursuing an independent public listing for the unit. Earlier this year, in March, the consumer goods company announced its intention to spin off its ice cream business and explore interest from private equity buyers for popular brands like Ben & Jerry’s, Magnum, and Wall’s. In the past 12 months, the stock has delivered a return of over 18.5%.
Hotchkis & Wiley Funds highlighted Unilever PLC (NYSE:UL)’s strong performance in its Q3 2024 investor letter. Here is what the firm has to say:
“Unilever PLC (NYSE:UL) is one of the world’s leading suppliers of consumer goods in the food, home care, and personal care categories, maintaining #1 or #2 market share over 75% of its business. With a new CEO and the involvement of an activist investor (Trian), Unilever is focused on execution and consistency, expecting low to mid-single digit volume-driven top line growth over the medium term, profit growth ahead of sales growth due to operating leverage and mix, and consistent return of cash to shareholders. Additionally, the company has announced plans to separate the Ice Cream business (13% of 2023 sales), which is expected to be completed by the end of 2025 and increase organic sales growth to 4-6% annually. Over the last quarter, the stock price reached a five-year high, as the company has continued to execute the plans laid out above. Unilever has not yet released their official third quarter results but has reiterated their confidence in achieving 3-5% organic sales growth for the full year, with the majority of this growth being driven by volume.”
Unilever PLC (NYSE:UL) also highlighted a strong performance in its cash segment, with free cash flow amounting to €2.2 billion during the period. By the end of the first half, the company had €4.97 billion in cash and cash equivalents, up from €4.1 billion at the close of December 2023. The company’s interim dividend comes in at £0.3696 per share for a dividend yield of 3.25%, as of December 29.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 22 hedge funds held stakes in Unilever PLC (NYSE:UL), up from 21 in the previous quarter. These stakes have a total value of roughly $2 billion. With over 16.7 million shares, Fisher Asset Management was the company’s leading stakeholder in Q3.
